There may be a time in your life that you will need to act as the executer of the estate for a friend or relative. There are many obligations that an executor is legally responsible for. In some circumstances the executor is personally liable if they do not handle the estate properly. Being an executor is a serious role and can be challenging and difficult.
With the ever-increasing complex estate laws the executor could serve for several years before the administration of the estates in completed. Generally the duties of an executor include; asset collecting and managing, file and pay tax, pay off existing debt, and to distribute assets in strict accordance with how the deceased directed.
The major duties for someone acting as an executor include the following.
Probate: If the deceased left a Will the executor will probate it. The probate process will allow the Will to be admitted to the court, which give it legal effect. No fiduciary actions requested in the Will can take place until the court has decided that the Will was executed properly within state law. One the Will is admitted the executor can then carry out what is stipulated.
Create an Employer Identification Number (EIN): This number should be requested from the IRS and acts as the identification number for the estate. All tax returns and any other IRS paperwork should reference this number. A written notice should also be provided to the IRS that an executor is handling the estate, this will allow access to tax records and information.
Pay Debts: Claims made on the estate by creditors must be paid. Some claims may need to be litigated in order to prove their validity. Any other bills must also be paid such as payments for attorneys, appraisers, and accountants.
Estate Management: Legal titles of all probate assets are transferred to the executor for management. A public accounting of all estate assets is required by the probate court. The estate may have assets that need to be researched and found in order to be collected. The executor may have to run the business of the deceased, sell real estate or securities, or manage the investment portfolio of the deceased.
Tax Issues: All required estate and income taxes filings are the responsibility of the executor. If there are errors in the filing of taxes the executor can be personally liable for all tax payments.
Asset Distribution: Once all expenses, liabilities and debts have been paid the assets of the estate can by distributed by the executor. Many times, beneficiaries are able to receive part of their inheritance before the estate is closed. In any case the executor is responsible for the distribution.
Being the executor of an estate can be a very difficult job. Before accepting the role as and executor a person really needs to think if they have the time and skill to take on such a lofty responsibility. Often people will hire attorneys to act as the executor, or will hire an attorney to assist with completing the process properly.